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Staff turnover and organizational performance: The case of a microfinance organization

Author

Listed:
  • Giuliano Romina

    (Human Resources and Responsible Organizations, Warocqué School of Business and Economics University of Mons, Mons, Belgium)

  • Godfroid Cécile

    (Management and Organization Studies, Warocqué School of Business and Economics, University of Mons, Mons, Belgium)

  • Radermecker Laure

    (Management and Organization Studies Warocqué School of Business and Economics, University of Mons, Mons, Belgium)

Abstract

Aim/purpose – This study examines the relationship between staff turnover and performance in the microfinance industry in a dynamic perspective and investigates some contingency factors that moderate this relationship. Design/methodology/approach – We ran random-effects and GMM models based on a database of 2,814 branch-month observations from a specific microfinance organization. Findings – It takes three months to see a significant negative impact of turnover on the volume of a branch’s loan portfolio. Moreover, it takes four months after the turnover event for this negative impact to be counterbalanced. After four months, turnover stops having negative consequences and even becomes advantageous in terms of loan portfolio growth, but this positive effect lasts only one month. The effect of turnover thus appears to be particularly limited in time. Finally, we find that the negative relationship between turnover rate and performance is weakened by the seniority level of departing loan officers and by the recruitment rate. Originality/value/contribution – First, this paper examines the duration of the consequences of turnover event, which is poorly studied in the literature. Second, it focuses on microfinance, an industry where relational capital is of high importance. Third, it extends the theory on turnover by highlighting that the seniority level of departing employees is a moderator in the relationship between turnover and organizational performance.

Suggested Citation

  • Giuliano Romina & Godfroid Cécile & Radermecker Laure, 2023. "Staff turnover and organizational performance: The case of a microfinance organization," Journal of Economics and Management, Sciendo, vol. 45(1), pages 413-440, January.
    • Handle: RePEc:vrs:jecman:v:45:y:2023:i:1:p:413-440:n:4
    DOI: 10.22367/jem.2023.45.16
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    References listed on IDEAS

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    1. Patrick M. Wright & John J. Haggerty, 2005. "Missing Variables in Theories of Strategic Human Resource Management: Time, Cause, and Individuals," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(2), pages 164-173.
    2. Patrick M. Wright & John J. Haggerty, 2005. "Missing Variables in Theories of Strategic Human Resource Management: Time, Cause, and Individuals," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(2), pages 164-173.
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    More about this item

    Keywords

    staff turnover; performance; context-emergent theory; microfinance; GMM;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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